HIGH COURTS BLOCKS KRA FROM DEMANDING MINIMUM TAX
Minimum tax was introduced under the Finance Act 2020 to be charged at the rate of one percent of the gross turnover of a business starting January 1, 2021. justice Odunga in a court ruling has termed minimum tax unconstitutional.
Samuel githinji 
Machakos high court Justice Odunga has declared a section of tax laws requiring companies to pay minimum tax to the KRA unlawful and unconstitutional.
The ruling was
made on Monday 20th September; the high court judge said that it’s unfair to subject companies making losses to companies with a history of tax evasion.
He said companies should seize remitting the minimum tax and issued an order barring The Kenya Revenue Authority from demanding the minimum tax.
“Minimum tax provisions are unconstitutional and the guidelines should be considered void. I, therefore, issue an order restraining KRA from implementing, further implementing or enforcing the provisions of Section 12D of the Income Tax Act”
He clarified that minimum tax results in double taxation and would cripple the loss-making companies.
“The punitive amendment only favors the profit-making enterprises. The solution is not to subject all businesses to harsh laws but come up with more effective measures to curb tax evasion. “
